Singareni Collieries to cut supply to cement producers

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India: Singareni Collieries Company Limited (SCCL) has decided to cut coal supplies to the cement industry as it prioritises thermal power plants in Telangana and Andhra Pradesh. Power companies in the two states use 66% of coal produced by SCCL. However, the plants have been unable to work to their full capacity in the second half of 2014 due to a shortage of coal, according to SCCL General Manager S Chandrasekhar.

The decease in coal supplies to the cement producers is expected to make prices rise. Local media reports that the coal from SCCL is more suitable for cement production than power generation as it has a high ash content of 35 – 40%. SCCL is also reported to have encountered several instances of 'misuse' of allocated coal by cement companies. 160,000t/day or 16% of the total coal production is currently allocated to the cement industry and another 6.6% is allocated to captive power plants run by cement companies.

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